Recovery of excess pay from a retired employee is impermissible absent fraud or misrepresentation.

The petitioner, a retired Junior Engineer with BESCOM, challenged an order dated 21 January 2022 and sought refund of ₹2,81,887 recovered from his pension on the ground that excess pay had been granted due to an error approximately 15 years earlier.

He maintained that the excess payment resulted from the respondents’ mistake and involved no fraud or misrepresentation on his part.

The respondents’ counsel accepted that recovery from a retired employee could not be made in the absence of fraud or misrepresentation.

1. Whether the respondents could recover excess payments from the petitioner’s pension when the excess payment was not attributable to fraud or misrepresentation by him.

2. Whether the petitioner was entitled to a refund of the amount recovered.

The Court relied on Jogeswar Sahoo v. District Judge, Cuttack, 2025 SCC OnLine SC 724, which applied the principles in State of Punjab v. Rafiq Masih, (2015) 4 SCC 334, and other Supreme Court decisions.

Where excess pay results from the employer’s erroneous application or interpretation of rules, and not from an employee’s fraud or misrepresentation, recovery may be barred as inequitable.

Rafiq Masih identifies, among other situations, recovery from retired employees and recovery of payments made for more than five years before the recovery order as ordinarily impermissible.

The Court found that the recovery related to an alleged pay error made approximately 15 years earlier and that there was no fraud or misrepresentation by the petitioner.

Applying the principles in Rafiq Masih, it held that recovery from the petitioner’s pension was impermissible, particularly given his retired status and the absence of any fault on his part.

The Court directed the respondents to refund ₹2,81,887, together with interest at 6% per annum, within eight weeks from receipt of the order.